Regulatory Statement

Purpose

This Regulatory Statement (the “Statement”) sets out the position of BC Financial Services Authority (“BCFSA”) with respect to the requirements applicable to a trade name under which a B.C. incorporated credit union carries on business or by which a credit union identifies itself. Section 14.3 [Other name] of the Credit Union Incorporation Act (“CUIA”) and section 1 [Prescribed name requirements] of the Credit Union Incorporation Act Regulation (the “Regulation”) provide the requirements.

Background Information

The CUIA permits a credit union to carry on business under, or identify itself by, a name other than its corporate name (a “trade name”), subject to the Regulation. A credit union’s corporate name is the legal name under which it was incorporated. This Statement is intended to provide a plain language explanation of the restrictions on a credit union’s use of a trade name, and to provide BCFSA’s position that the CUIA and Regulation do not restrict the use of translated credit union names. Nonetheless, use of additional names by a credit union attracts risk and must be accompanied by the required display and disclosure of the credit union’s corporate name.

This Statement is not exhaustive of all possible corporate or trade name requirements and does not consider prohibited names. See also BCFSA Regulatory Statement 23-019: Name Requests by Non-Financial Institutions. If a credit union requires professional translation services or legal advice about its name, they should retain a professional to advise them.

Requirements

Single Trade Name Permitted

The Regulation permits a credit union to carry on business under its corporate name and one trade name, subject to a limited exception allowing for the use of additional legacy trade names.

A trade name must be:

• Registered with the Registrar of Companies (“Registrar”); and
• Provided to the Superintendent of Financial Institutions (“Superintendent”).

A trade name is different from any branding that may be used to describe products and services of the credit union (e.g., the “Cheerful Chequing” or “Sensible Savings” account). A trade name is used for carrying on business or for identifying the credit union itself (that is, as an alternative to the credit union’s corporate name). Even so, the CUIA and Financial Institutions Act (“FIA”) require that a credit union ensure its identity is clear in all dealings with consumers, which BCFSA interprets as including disclosure of the credit union’s corporate name. The CUIA includes specific requirements for display of the credit union’s corporate name including, but not limited to:

• At all physical locations of the credit union;
• In all notices and publications within the credit union’s control (which includes advertising, news releases, websites or other electronic publications of the credit union); and
• On all business contracts and correspondence.

The Regulation further requires that before any individual opens an account, disclosure of the credit union’s corporate name and all trade names, among other disclosures, is provided.

Legacy Trade Name

Where a credit union has amalgamated with or acquired another credit union (the “Predecessor”), the amalgamated or acquiring credit union may use an additional trade name derived from the Predecessor’s corporate name or trade name, with notice to the Superintendent as set out in the Regulation. The notice must identify which branch offices are using the name derived from the Predecessor. BCFSA also expects that a trade name derived from a Predecessor will bear an obvious connection to the corporate or trade name of, and in use by, the Predecessor. The legacy trade name exception permits a credit union to take the time required to fully integrate the Predecessor; to minimize any interruption in services to the former members of the Predecessor; and/or to maintain the goodwill in a Predecessor’s name. Disclosure and display of the credit union’s corporate name is required, as set out above.

Translated Corporate and Trade Names

Although the primary language of business in B.C. is English, many British Columbians have a first language, or speak a language at home, other than English. Credit unions may use one or more translations of their corporate name and permitted trade names to make their financial services more accessible to members. BCFSA does not consider a translated name to be an additional trade name and therefore a translated name does not usually attract the trade name restriction in the Regulation.

However, when using a translated name, credit unions must continue to make the required display and disclosure of their corporate name.

That is, a credit union cannot use a translation of their corporate name without also ensuring they use and disclose their corporate name. It also may not use the translated name together with the words “credit union” or any other words, in a way likely to deceive, mislead or give a false impression to the public about the identity of the holder of the deposit business authorization from BCFSA. Use of a translated name attracts risks of proper credit union identity disclosure and of compliance with the CUIA and FIA. Credit unions must have practices in place to ensure disclosure and display of their identity and corporate name.

Best practices when using a translated name include:

• Retaining a professional translator to advise the credit union;
• Using a literal or phonetic translation of the credit union’s name where possible;
• Reviewing the requirements of the FIA and CUIA, including to ensure that the credit union is displaying and disclosing its corporate name as required;
• Making the disclosures required in section 1(6) of the Regulation (for trade names) in all written materials including translated names; and
• Restating the full corporate name beside any partial translations that use the words “credit union” or any words used in connection with the business that may otherwise mislead the public or to give a false impression of a stand-alone credit union, e.g., use Translated Name (Corporate Name) Credit Union and not Translated Name Credit Union.

Enforcement

BCFSA will not review or provide an approval of translated names of any credit union. It is the responsibility of the credit union to ensure that all translations of its corporate or trade names are accurate and appropriate, and to ensure that its translated names are not misleading in any way.

BCFSA will enforce the requirements under the Acts that BCFSA administers and the requirement for credit unions to make required display and disclosure of their corporate name.

Where BCFSA receives a complaint, or identifies a challenge, with respect to any names in use by a credit union (trade, legacy or translated), it will assess and further investigate as needed. Unclear disclosure of identity or evidence of consumer confusion may also require an increase in the credit union’s risk profile under BCFSA’s Supervisory Framework.

The Superintendent may use enforcement tools including:

• Prohibiting the use of a form of contract or other document if, in the opinion of the Superintendent, a form of contract or other document provided by a credit union to its customers, or related advertising, is unfair, misleading or deceptive (FIA, s.93 [Prohibition against unfair, misleading, or deceptive documents]);
• Ordering the credit union to cease an act or a course of conduct, or to take any remedial action that the Superintendent considers necessary (FIA, s. 244 [Authority’s order to cease or remedy]);
• Requiring the credit union to pay an administrative penalty for contravening prescribed provisions (FIA, s. 253.1[Administrative penalties] and Administrative Penalties Regulation); or
• Requiring the credit union to provide a written undertaking to rectify misconduct (FIA, s. 208 [Power to require undertakings and make agreements]).In addition, breach of section 91 [Disclosure of identity in advertising, etc.] of the FIA or section 14(3) [Corporate name] of the CUIA may be an offence. If a credit union commits an offence, an employee, officer, director, or agent of the credit union who authorizes, permits, or acquiesces in the offence commits the same offence. If an officer or director of the credit union, or a person acting on the credit union’s behalf, knowingly permits the credit union not to use or display the credit union’s corporate name as required in section 14.2 [Corporate name to be displayed] of the CUIA, they may be personally liable to indemnify a purchaser, supplier or holder of any security who is misled.

Instructions

All trade name requests must first go through the Registrar.

To provide notice of a trade name to the Superintendent, as required by the Regulation, please submit a copy of the Results of Name Request received from the Registrar, the Review of Request for Name Registration Form (if BCFSA’s consent is required by the Registrar), together with required attachments, to the Approvals Branch at statapprovals@bcfsa.ca.

For questions, contact your Relationship Manager at BCFSA .

Legislation

• CUIA, ss. 14-14.2, 101
• Regulation, s. 1
• FIA, ss. 91, 93, 208, 244, 252, 253.1
• Financial Products Disclosure Regulation, s. 3
• Copies of the legislation are available from www.bclaws.gov.bc.ca

Regulatory Statements establish the form and content of a regulatory submission; prescribe the manner of meeting or enforcing a requirement existing in an enactment; and/or provide the regulator’s view of the laws that BC Financial Services Authority administers. Regulatory Statements are made pursuant to a requirement or power contained in provincial legislation. Compliance with a Regulatory Statement is therefore mandatory. Regulatory Statements may refer to law, practice, or background existing at the time of publication. If relying on the legal information contained in a Regulatory Statement, confirm that any references to the law, including enabling legislation, are up to date and obtain independent legal advice, when needed. Regulatory statements are effective on the date of their publication, unless stated otherwise.